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In a note Wednesday, Cowen Analyst Charles Neivert stated that Mosaic
MOS and Agrium
AGU may both cut their output for the summer in order to balance the current potash market.
These production cuts are projected to limit declines in prices, while higher costs of production may be a drag on second-half earnings.
The report also noted that export volumes may decrease for the first-half with the Chinese off-take agreement expiring in June, while a weak Indian Rupee is making purchases more expensive. Neivert also mentioned that he expects the Chinese to have an upper hand in price negotiations for the second-half.
Mosaic shares fell sharply at the open, and are down currently 2.09 percent to $54.74, while Agrium shares bounced earlier in the morning, and are up 1.48 percent to $86.28.
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